More than 11 million tonnes of imported coal, enough to light up five cities as big as Delhi, are stacked at Indian ports for over four months as power producers refuse to buy costly coal despite acute fuel shortage.
The importers face huge loss as the depreciation of the rupee and the recent fall in international coal prices add to their woes. Industry insiders said coal stockpile at various ports reached record level as traders were initially not willing to sell the commodity at loss. Disinterest among power generating companies to blend imported coal that increases electricity tariff also led to the glut. Industry sources said traders under pressure from creditors wanted to sell quickly.
“About 11.57 million tonnes of coal is lying at the ports. The traders, mostly small and inexperienced ones, bought coal from Indonesia and South Africa at higher prices. But the traders are holding the stock as they would not even be able to recover the costs with the kind of purchase offers being received,” a senior official in Bhatia International said.
Global coal prices have come down by $5 a tonne in the past few months due to slowdown in various economies.
Rupee fell to a two-and-half-year low of 50.42 against dollar on Friday on the back of weak industrial production data and a sliding stock market.
“The traders placed coal supply orders a few months back when the rupee was trading at about 43-44 to a dollar. When the coal landed at the ports, rupee had started to fall and was about 48 to a dollar. Today, they are receiving enquiries at about 7% less than the prevailing price,” a senior official in Adani Enterprises said.
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